Another day, another twist in the saga of Britain’s expensive energy. This time, it comes courtesy of one of the Big Six suppliers so often vilified for repeatedly raising prices despite the squeals from cash-strapped customers. In a surprise show of consumer friendliness, SSE has committed itself to freezing its domestic gas and electricity prices until 2016.
It can hardly be coincidental that the move comes just one day ahead of a scheduled announcement from energy regulators that is expected to launch a full-scale competition inquiry into a sector routinely accused of making excessive profits by exploiting customers’ lack of a real alternative.
But politicians on both sides of the spectrum were quick to claim a victory. For David Cameron, SSE’s decision is a vindication of his cutting green tariffs in December. For Ed Miliband, it is pre-empting the attention-grabbing energy policy he outlined with such fanfare at the Labour Party conference last autumn.
It is certainly true that SSE appears to be acting out Mr Miliband’s intention, should he be voted into Downing Street in 2015, to impose an automatic price freeze for two years, pending an investigation into the effectiveness of the energy market. The company is also separating its generation and retail businesses, a course of action also favoured by the Labour leader.
Except that, as much as SSE appears to be proving Mr Miliband’s case, it is also proving that of his opponents. There were two main arguments against the Labour proposal. One was the drag on long-term investment – in the energy sector and beyond – of a putative government with overtly interventionist whims. The other was the more narrow observation that capping prices would mean jobs lost.
Sure enough, alongside yesterday’s announcement, SSE set out its intention to cut 500 jobs and scale back its investment in expensive wind farms so as to absorb the cost of the price freeze. If we needed evidence that there is no quick and painless fix to the problem of high energy prices, SSE has just provided it.